DHS Initiates Changes that Knock about 17,000 Adults from BadgerCare

The Department of Health Services (DHS) issued an Operations Memo at 6:15 this evening explaining the changes to BadgerCare that it will implement on July 1. The “ops memo” was distributed after DHS received a letter late today from the federal department of Health and Human Service indicating that the changes to BadgerCare affecting adults over 133 percent of the poverty level have been approved.

The package of policy changes being implemented is a little narrower than what was reviewed and approved by the Joint Finance Committee in mid-March, and by my calculations it will result in at least 17,000 adults losing their BadgerCare coverage. That's only about a fourth of the number of people who wold have lost coverage under the Walker Administration's original proposal. In addition to those who lose coverage, more than 33,000 adults who remain in BadgerCare will have higher premiums.
We are very disappointed that the state is implementing changes that will cause BadgerCare participation to drop by more than 17,000 people, at a time when the shrinking Medicaid deficit gives the state better options for balancing the Medicaid deficit. While the policy changes that were approved are very worrisome, we are relieved that federal officials concluded that the health care reform law does not allow the state to reduce coverage of children and lower income adults.

Thanks to the “maintenance of effort” requirements in the Affordable Care Act (ACA), about 48,000 people – including more than 29,000 children – are going to remain on BadgerCare. However, those requirements will be eliminated if the Supreme Court strikes down the whole law or Congress repeals it.

The federal approval of the changes announced today shouldn’t be misconstrued as an endorsement of those policy choices by the Obama Administration. The Department of Health and Human Services merely determined which of the state’s proposals were allowed by the health care reform law, not whether those options are good public policy.

These changes to BadgerCare are not the last of the cuts that DHS hopes to make. A proposal that is still pending would narrow the health care services covered for all children and parents above the poverty level, and would impose much higher co-pays. If approved by federal officials, those changes would apply to more than 300,000 BadgerCare participants.